Question

The balance in beginning Work in Process at Uli Rubber Company for direct labor was $137,300. During the month of March, an additional $807,820 of direct labor was incurred, and 33,500 pounds of rubber were produced. At the end of March, 9,800 pounds of rubber were in process and the units were 60 percent complete. At the start of March, the company had 5,600 pounds of rubber that were 30 percent complete.

Calculate the cost per equivalent unit for labor, assuming that labor is added uniformly throughout the production process. (Round answer to 2 decimal place, e.g. 25.26.)

Cost per equivalent unit

$

per pound

Answer 1

Please give positive ratings so I can keep answering. It would help me a lot. Please comment if you have any query. Thanks!

Uli Rubber Company

As nothing is mentioned so I am putting solution for both Weighted average and FIFO Method:

Workings
Started and completed in the month:		Note
Rubber produced	33,500.00
Less: Opening Inventory	5,600.00
Started and completed in the month:	27,900.00	B

Weighted average Method:
Equivalent Units of production	Whole Units	% Completed	EUP	Note
Flow of production of units:
From beginning Inventory	5,600.00	100%	5,600.00
Started and completed in the month	27,900.00	100%	27,900.00	See Note B
Units ending in WIP Inventory	9,800.00	60%	5,880.00
Equivalent Units of production	43,300.00		39,380.00	D

Cost per Equivalent Unit	EUP- Labor	Note
Costs in opening inventory	137,300.00
Costs incurred during the month	807,820.00
Total Costs	945,120.00	C
Equivalent Units of production	39,380.00	See D
Cost per Equivalent Unit	24.00	E=C/D

FIFO Method:
Equivalent Units of production	Whole Units	% Completed	EUP	Note
Flow of production of units:
From beginning Inventory	5,600.00	70%	3,920.00
Started and completed in the month	27,900.00	100%	27,900.00	See Note B
Units ending in WIP Inventory	9,800.00	60%	5,880.00
Equivalent Units of production	43,300.00		37,700.00	D

Cost per Equivalent Unit	EUP- Labor	Note
Costs incurred during the month	807,820.00
Equivalent Units of production	37,700.00	See D
Cost per Equivalent Unit	21.43	E=C/D